SUSTAINABLE DEBT GLOBAL STATE OF THE MARKET 2020 - GREEN SOCIAL
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SUSTAINABLE DEBT
GLOBAL STATE
OF THE MARKET
2020
GREEN
SOCIAL
SUSTAINABILITY
Prepared by Climate Bonds Initiative. Sponsored by DekaBank and State Street Global Advisors.
Sustainable Debt Global State of the Market 2020 Climate Bonds Initiative 1About this report Contents
Introduction 2
This is the 10th iteration of Climate Bonds’ global State of the Market
Report. Historically, the report has described the shape and size of the Methodology 3
green bond market, but in October 2020, we published the inaugural
Report highlights 4
Sustainable Debt Global State of the Market H1 2020 with an extended
remit to include social and sustainability themed debt as well as the Green 6
traditional green bond universe. This report describes the shape and
Sustainability 11
size of the green, social and sustainability (GSS) themed debt market up
to the end of 2020. Social 14
Spotlight: The development
of transition instruments 17
Cumulative size: Green, Sustainability, Social bonds December 2020
Spotlight: Pandemic
recovery spending 19
Spotlight: EU GSS market leadership 21
Outlook 28
Appendices 29
Green Sustainability* Social*
Endnotes 30
Total size of market USD1.1tn USD316.8bn USD315.6bn
Number of issuers 1428 178 601
Number of instruments 7716 885 1230
Number of countries 71 30 36
Number of currencies 42 33 25
*The Social and Sustainability bond database is being finalised and deal-level data may be subject to changes. Further, the Social and
Sustainability Bond Database follows a different (less stringent) methodology than the Green Bond Database The aim of this paper is to provide
an indication of the shape and size of the market, and the data profile should be regarded as provisional.
About the Climate Bonds Initiative
The Climate Bonds Initiative (Climate Bonds) Climate Bonds conducts market analysis, policy
is an international investor-focused not-for- research, and market development; advises
profit organisation working to mobilise the governments and regulators; and administers
USD100tn bond market for climate change a global green bond standard and certification
solutions. It promotes investment in projects scheme. Climate Bonds screens green finance
and assets needed for a rapid transition instruments against its Climate Bonds Taxonomy
to a low carbon, climate resilient, and fair to determine alignment and uses sector
economy. The mission focus is to help drive specific criteria for certification. Climate Bonds
down the cost of capital for large-scale Certification is a labelling scheme. Rigorous
climate and infrastructure projects and to scientific criteria ensure that it is consistent
support governments seeking increased with the 2˚C global warming limit of the Paris
capital markets investment to meet climate Agreement. Certification requires initial and
and greenhouse gas (GHG) emission ongoing third-party verification to ensure the
reduction goals. assets meet the metrics of Sector Criteria.
Sustainable Debt Global State of the Market 2020 Climate Bonds Initiative 2Methodology
Scope of analysis Social and sustainability
Not included in this report
We cover three sustainable debt themes based Market participants have not yet developed a
Transition labels
on the projects, activities, and expenditures “social taxonomy” or equivalent classification
Transition finance describes instruments
financed: green, social, and sustainability. and screening system, though work on this is
financing activities that are not low- or zero-
Pandemic bonds are included as a sub-set of the ongoing in the EU and elsewhere.3 Climate Bonds
emission (i.e., not green), but have a short-
social theme. does not screen social and sustainability bonds’
or long-term role to play in decarbonising
use of proceeds against performance thresholds.
The themes can be described as follows: an activity or supporting an issuer in its
The use of proceeds are, however, classified
transition to Paris Agreement alignment.
in accordance with the respective labels and
The transition label enables inclusion of a
categorised as follows:
more diverse set of sectors and activities.
Sustainability: label describes a combination
Green: dedicated environmental benefits At present, transition bonds predominantly
of green and social projects, activities, or
(captured since 2012) originate from highly polluting, and hard-
expenditures e.g., sustainable; SDG; SRI; ESG, etc.
to-abate industries. They do not fall into the
Social: label is exclusively related to social existing definitions of green but are a critical
projects e.g., pandemic, COVID-19, housing, component of a transition to net zero.
gender, women, health, education, etc. Example sectors include extractives such as
Social: dedicated social benefits
mining; materials such as steel and cement;
(captured since 2020) Thus, any instrument financing only green
and industrials including aviation. Work
projects is included in the green theme
around building standards for transition
irrespective of its label. On the other hand, a
activities is underway; we cover this in more
sustainability-labelled bond that only finances
detail in the dedicated segment on page 17.
social projects, as well as one that finances a
Sustainability: green and social benefits
combination of green and social, is considered Performance-linked instruments
are combined into one instrument
to fall under the sustainability theme. Because Performance or KPI-linked debt instruments
(captured since 2020).
of this, our analysis of other themes provides an are excluded from this analysis. These
This paper only analyses labelled debt. Our initial indication of capital market funding aimed instruments raise general purpose finance
upcoming Climate-Aligned Bonds and Issuers at each theme based on the deal label (see and involve penalties (e.g., coupon step-
report will explore the scope of unlabelled debt Appendix B). ups) linked to not meeting pre-defined,
to finance climate aligned activities. time-bound sustainability performance
NB: Throughout this report ‘Pandemic’ refers
improvements. The two main types of
to deals with a COVID-related label such as
Methodology overview pandemic response, COVID-19 etc.
instrument are commonly referred to as
Sustainability-Linked Bonds (SLBs) and
This report is based on the Climate Bonds
Sustainability-Linked Loans (SLLs).
Green Bond Database, as well as the Social and
Sustainability Bond Database. To qualify for Climate Bonds does not presently examine
inclusion, debt instruments must a) have a label or track data on SLBs or SLLs, preventing
and b) finance sustainable projects, activities, or inclusion of these categories of debt
expenditures. in this analysis. However, coverage of
performance-linked instruments is currently
Debt labels describe the types of projects,
in development and the theme is discussed
activities, or expenditures financed, and/or their
on page 17.
benefits. ‘Green’, ‘Social’, and ‘Sustainability’
labels are the most common in each theme, but
a broad range of labels is used (see Appendix A).
Green
All deals in the green theme have been screened
to verify their integrity. Screening is based on a
set of process rules stipulated in Climate Bonds
Green Bond Database Methodology, including
the following two overarching criteria:1
1. Deals must carry a variant of the green label
2. All net proceeds must verifiably (based
on public disclosure) meet Climate Bonds’
green definitions based on the Climate Bonds
Taxonomy2
We review all green debt instruments to ensure
their green credentials.
Sustainable Debt Global State of the Market 2020 Climate Bonds Initiative 3Report highlights
At the end of 2020, the sustainable debt market Green, social, and sustainability bond issuance doubled in 2020
had reached USD1.7tn, and almost 10,000
instruments had been issued under GSS labels 800
since 2006.
Green Social Sustainability
USD700bn worth of GSS instruments was issued 600
in 2020, almost double the prior year which stood
at USD358bn. While green remains the dominant
400
theme, and was the largest source of outright
capital, the social and sustainability themes grew
USD Billions
dramatically and achieved higher volumes than 200
all previous years combined. As a result, in 2020
total issuance was more evenly spread across the
themes compared to prior periods. 0
2015 2016 2017 2018 2019 2020
Market Analysis Source: Climate Bonds Initiative, 2021
The sustainable debt market in 2020 Social bonds increased sharply in response to COVID-19
• The COVID-19 pandemic caught many off 2000
guard and impacted the issuance of all types
of bonds towards the end of the first quarter. Green Social Sustainability
1600
However, the bond market proved to be a
Number of GSS securities
flexible source of finance to help with both 1200
the immediate impacts as well as longer-term
recovery plans. This led to the rapid growth of
800
the sustainable and social debt markets and
the massive increase in instruments being
400
issued with a pandemic Use of Proceeds (UoP),
which contributed to a ten-fold increase in the
0
social volume compared to 2019.
2015 2016 2017 2018 2019 2020
• The first pandemic bond of 2020 was issued on
Source: Climate Bonds Initiative, 2021
5 February, a RMB1bn (USD143m) deal from
Zuhai Huafa Group from China. Pandemic-
Green bonds had a strong finish
themed issuance peaked in February and 60
continued to decline for the rest of the year,
50 Green Social Sustainability
especially in China.
Amount issued USD Billions
• There were large drops from all issuer types 40
in March as COVID-19 took hold, but central
banks were quick to react, and the market had 30
stabilised by April.
20
• Sovereign issuers have the ultimate power to
extend the breadth and depth of the GSS bond 10
markets due to their scale and influence. Ten
0
sovereign issuers entered the GSS bond market
in 2020, bringing the total number to 22. This JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
influenced the shape and size of GSS bond Source: Climate Bonds Initiative, 2021
markets. A list of sovereign GSS bond issuers is Social bonds dominated the earlier months of 2020
on page 15. 400
Green Social Sustainability
300
Number of securities
200
100
0
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Source: Climate Bonds Initiative, 2021
Sustainable Debt Global State of the Market 2020 Climate Bonds Initiative 4Green bond market Sustainability bond market Social bond market
score card 2020 score card 2020 score card 2020
Percent change Percent change Percent change
2020 from prior year 2020 from prior year 2020 from prior year
Size of market 9% Size of market 131% Size of market 1017%
USD290bn USD160 bn USD249bn
Number of issuers 14% Number of issuers 5% Number of issuers 1107%
634 83 543
Number of -9% Number of -26% Number of 488%
instruments: 1696 instruments: 253 instruments: 911
Average size of 19% Average size of 214% Average size of 90%
instrument instrument instrument
USD171m USD630m USD273m
Number of 6% Number of 0% Number of 89%
countries 55 countries 23 countries 29
Number of 0% Number of -14% Number of 64%
currencies 34 currencies 25 currencies 18
The green debt market recorded a slight increase The amount of debt issued under the The social bond market exploded in 2020,
compared to 2019, thanks to a strong third sustainability theme multiplied by 2.3 times recording a more than 10-fold increase (1017%)
quarter. While the number of issuers increased, the compared to 2019. More issuers entered the year-on-year, the sharpest annual growth in
number of instruments declined. The average size market, and the size of the individual instruments any theme since the inception of the GSS debt
of the individual instruments issued under green is was, on average, three times larger than the prior market. The number of issuers using social labels
the smallest of the three themes, suggesting that year. Individual instruments increased in size and grew by a similarly astonishing number and
the green debt market has broad appeal among a were larger (on average) than those issued under encompassed a broader range of countries and
range of issuer types. Multiple small instruments the green or social labels. currencies than ever before.
issued by US Munis and Fannie Mae under the
green theme is a key contributor to this.
Spotlight sections
Pandemic recovery spending GSS bonds, having entered the thematic bond
This paper includes forward looking spotlight market in 2020. The presence of such a large-
Post-pandemic recovery spending linked to
analyses of the following three themes which will scale issuer of high credit quality is contributing
GSS expenditures encourages crowding in of
continue to influence the development of the to the creation of a transparent, liquid funding
such investment by introducing more projects
GSS debt market in 2021 and beyond: source for any entity wishing to support their
into the real economy. We examine how four
sustainability goals through the debt markets
The development of transition governments have implemented measures to
(page 21).
instruments ensure a sustainable recovery on page 19.
No industry or entity can be left behind in EU GSS market leadership
the transition to a net-zero carbon economy
Europe is home to the world’s largest GSS bond
and a more resilient and equal society. The
market, which has developed with the strong
development of instruments to accommodate a
leadership of the European Union (EU). The EU
broader range of issuers and activities is essential
has stated its ambition to be the first climate
in extending the thematic bond market and can
neutral bloc by 2050, and this objective is being
help investors to build diversified portfolios. We
pursued by connecting policy and budget,
explore the development of transition labels on
regulation, and the support of institutions
page 17.
including the ECB. The EU is the largest issuer of
Sustainable Debt Global State of the Market 2020 Climate Bonds Initiative 5Green
Introduction backed entities and non-financial corporates, each The Latin America & Caribbean (LAC) region exhibited
contributing 25%. Government and policy support close to 65% growth compared to the prior year,
• In early December,
is creating more opportunities for private sector reaching USD7.9bn in 2020. More than half of the
the Climate Bonds
investment in Europe and a more diverse range of total originated from Chile, including four sovereign
Green Bond Database
issuers are coming to the market beyond utilities, bonds worth a total of USD3.8bn (of which USD2.2bn
reached the USD1tn
real estate companies, and banks. For example, were issued in EUR and the residual in USD).
milestone. While other
in the woefully undersupplied automotive sector,
data sources had Africa had its strongest year yet, with USD1.2bn
Daimler AG (EUR1bn/USD1.1bn), Volvo (EUR500m/
already called this benchmark, the Climate in green debt originating from: two South
USD588m), and Volkswagen (EUR2bn/USD2.3bn)
Bonds Database only includes bonds with African non-financial corporates (a loan from
all issued debut green bonds in 2020.
100% of net proceeds dedicated to green FirstRand Bank (USD225m), and a USD200m
assets, projects, and/or expenditures aligned North America remained broadly static on 10-year bond from Standard Bank of South
with the Climate Bonds Taxonomy. the prior year with USD61.5bn of green bonds Africa); a bilateral loan from Ghana worth
compared to USD60bn in 2019. Considering that USD41m (EUR35m); and Egypt’s USD750m
• In a year characterised by uncertainty, green
2020 was a record year for total (i.e., including debut sovereign green bond in September.
issuance rebounded in the second half of 2020
vanilla) USD-denominated bond issuance – most
to reach a record-breaking USD290.1bn by the The drop in green bonds from Asia-Pacific (APAC)
of which originates from US issuers – this is
end of December, compared to the prior record and SNAT issuers can largely be explained by
surprising, but the focus was on securing flexible
of USD266.8bn set in 2019. COVID-19 and the subsequent increase in social
funds, and refinancing at prevailing lower rates.
and sustainability bond volume. Such bonds
• 2020 started strong, but the COVID-19 pandemic We expect the change in administration to result
were issued to support healthcare, medical
quickly impacted issuance of all types of bonds in a sharper increase in green debt originating
supplies and other immediate needs arising from
in March. Government support packages took from the US as President Biden has already
the pandemic (see page 14).
effect in Q2 and issuers cautiously returned to the indicated strong support for sustainable finance.
market. Many public sector issuers turned their
attention to social- and/or sustainability-themed Green bond issuance rebounded in the second half of 2020
bonds to contribute to the immediate relief of
60
the economic shock driven by the pandemic and
its ramifications. By September, confidence had Loan Financial Corporate
returned and entities that had postponed green 50 Sovereign ABS
bonds earlier in the year were prepared, resulting Government-Backed Entity
in the most prolific third quarter recorded 40 Local Government
for green issuance. October and November
Development Bank
remained active prior to the US election, and
then issuance tailed off into year end. 30 Non-Financial Corporate
• Egypt, Germany, Hungary, and Sweden issued
20
debut sovereign green bonds, bringing the
total number of such issuers to 16.
USD Billions
10
• An increase in the number of external reviews
highlights how much emphasis investors are
putting on the integrity of the green label. 0
Most of the increase occurred in the Second
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Party Opinion (SPO) category. The number of Source: Climate Bonds Initiative, 2021
Certified Climate Bonds (CCB) also increased
and reached a cumulative total of USD150bn –
Europe was the dominant region for green debt in 2020
or 15% of the market – in October 2020. 300
Supranational Asia-Pacific
Regions
250 North America Africa
Four-fifths of the overall green volume originated Latin America
from developed markets (DM) in 2020, compared
200 Europe
to 73% in 2019.4 Emerging markets (EM) accounted
for 16% versus 22% the prior year, while the
contribution of supranational entities (SNAT) 150
was 4% against 5% in 2019. Chinese issuers
shifted their focus to social bond issuance, hence 100
impacting the overall EM number. Volumes in four
USD Billions
regions, notably Europe, increased in 2020, while
50
declining in the remaining two.
Europe was the largest source of green debt
0
in 2020, responsible for USD156bn or 48% of the
total. European issuance was led by government- 2014 2015 2016 2017 2018 2019 2020
Source: Climate Bonds Initiative, 2021
Sustainable Debt Global State of the Market 2020 Climate Bonds Initiative 6Countries USA, Germany and France lead 2020 green bond issuance
• The USA remained the largest source of
50 150
green debt with a total of USD52.1bn (18%)
almost matching the 2019 figure of USD52.9bn. Amount issued Issuer count
40 120
This is surprising given that total bond issuance
originating from the USA increased from
30 90
USD6.3tn in 2019 to USD12.3tn in 2020 but
under the circumstances, the priority seems to
Number of issuers
have been to secure financing at prevailing low 20 60
USD Billions
rates while maintaining flexibility with the use
of proceeds rather than issuing labelled debt, 10 30
perhaps for the first time.5
0 0
• Half of the USA’s green volume, and more
r
y
ay
ly
Sw ds
ce
th ina
en
an pan
Ca n
No a
ng ile
e
Ge SA
l
UK
than 70% of its green bonds, were issued
na
he
an
or
d
ai
Ita
an
n
rw
Ch
ed
na
U
Sp
Ne Ch
io
Ot
ap
la
rm
Ja
Fr
between August and November. Although
at
er
Si
the Biden administration is expected to
pr
Su
Source: Climate Bonds Initiative, 2021
rebalance US policy priorities in favour of
the climate agenda, a policy-led expansion preferring to issue under social labels – dynamics because they tend to have long-term
could push up long-term rates in the US. especially those pertaining to the pandemic investment plans in place. Development banks
Post-election, issuance (both vanilla and response – instead. Overall, bonds from were the exception to this rule, as many turned
green) slowed into year-end. Chinese entities reached just USD22.4bn, or their attention to issuing bonds under the social
70% of the prior year total of USD31.4bn. label to address the impacts of COVID-19. Average
• The US market had the largest number
individual deal sizes contracted from USD344m
of individual issuers with 144, but its • The comparison between the amount issued
in 2019 to USD277m in 2020, hence, total volume
private sector green bond market is still and issuer count indicates that many markets
from this issuer category decreased marginally
underdeveloped and continues to lack are still largely domestic in nature. The USA,
from USD58.7bn to USD55.7bn.
large, benchmark-sized green bonds with Sweden, China, and Japan, Norway, and the
adequate transparency. The market is UK have a high number of issuers compared Government-backed entities experienced
dominated by Municipal issuers classified as to the total amount of green bonds issued. the most aggressive growth (78%) in 2020. The
local governments, or government-backed France, Germany, the Netherlands, and Chile number of individual bonds more than doubled
entities. The mean size of the 747 green bonds exhibit the opposite, indicating a smaller from 125 to 267. USD17bn of the total amount
originating from the US was just USD70m. number of larger issuers. This format is more originated from France, split between 14
likely to attract the interest of the international bonds from 21 issuers. Société du Grand Paris,
• Two government bonds propelled Germany
investment community. referenced above, was responsible for 70% of
into second place. The inaugural 10-year
the volume, with seven bonds worth EUR11bn
green Bund was priced in September, followed
by a 5-year Bobl in early November with a
Issuer types (USD12.5bn). EDF, also French, was the second
largest issuer with a single convertible bond
combined size of EUR11.5bn (USD13.8bn).6 Broadly speaking, 2020 was characterised by
to finance renewable energy worth EUR2.4bn
Development Bank KfW sold 14 green bonds growth in public sector issuer types while private
(USD2.8bn). China was the second largest source,
in 2020, with a total face value of USD9.6bn sector volumes either remained static or shrunk.
with 17 bonds worth USD7.7bn, and the USA
(issued in multiple currencies). Overall, the As noted in our H1 2020 paper, public sector
took the third spot with 49 Muni bonds worth
amount of green bonds originating from issuers are typically less vulnerable to market
USD5.5bn.
Germany more than doubled from USD18.7bn
in 2019, to USD41.8bn in 2020.
Sovereigns and public sector entities lead growth in 2020
• France landed in third place with a total
100%
of USD37bn. The green government bond
(GrOAT) was tapped three times for a total
of USD7.4bn in 2020. The GrOAT is the single 75%
largest green bond in the market, with a
total amount outstanding of EUR27.4bn
(USD31.1bn).7 More pertinently, Société du 50%
Grand Paris (SGP) priced seven bonds worth
EUR11bn (USD12.5bn) in 2020. SGP was set up
in 2010 by the French Government to construct 25%
and deliver the ‘Grand Paris Express’ transport
network – an expansion of the existing metro
and commuter rail network in Île-de-France – 0%
and is funding the project entirely through the
2014 2015 2016 2017 2018 2019 2020
green bond market. By the end of 2020, the
entity had 13 green bonds outstanding. Sovereign Loan Development Bank
• The green bond market in China clearly Non-Financial Corporate Government-Backed Entity ABS
suffered from the ramifications of the
Local Government Financial Corporate
COVID-19 pandemic, with many issuers
Source: Climate Bonds Initiative, 2021
Sustainable Debt Global State of the Market 2020 Climate Bonds Initiative 7The local government issuer type grew by 50% EUR then USD lead green bond currency volumes 2020
in 2020, from USD11.8bn to USD18.5bn. More 100%
than half of the total came from 72 US muni
green bonds worth USD9.5bn. Among them, New
York MTA priced four bonds Certified under the
75%
Low Carbon Transport Criteria of the Climate
Bonds Standard, worth a total of USD3.9bn.
Nine sovereign issuers reopened or issued 50%
debut green bonds in 2020, contributing to 40%
growth in this issuer type compared to 2019.
The importance of sovereign green bonds rests 25%
on their size and profile, which catalyse green
market creation and make the green bond
market more accessible to other issuer types.8
0%
In 2020, Egypt, Germany, Hungary, and Sweden
printed debut sovereign green bonds, while 2014 2015 2016 2017 2018 2019 2020
Chile, France, the Netherlands, Lithuania, and EUR USD RMB SEK JPY GBP CAD SDG Other
Indonesia extended their liabilities through re-
Source: Climate Bonds Initiative, 2021
openings or additional bonds. Multiple countries
from different regions have stated their ambition private sector, and this category decreased by whereas 6% more was issued in EUR.
to join the sovereign GSS bond market in 2021, 25% year-on-year to USD9.5bn. Interestingly,
While issuers from 28 countries priced EUR-
thus we are optimistic about the continued the number of countries from which green loans
denominated green bonds, as the reserve
growth of this issuer type, see page 15. originated increased to 22 from 13, suggesting
currency of the world USD attracted the
this instrument type is becoming more popular in
Among private sector issuer types, non-financial largest number of international issuers,
more geographies.
corporates remained the largest source of green reaching 36 countries (including 20 that were
bonds, albeit with a modest 6% growth (USD60.1 We expect to see an increase in the number of classified as EM). Among CNY-denominated
bn in 2019 to USD64bn in 2020). Around two bonds from the private sector as high-profile green bonds, 28 out of the 30 issuers were
thirds of the bonds in this category originated public-sector support for ‘build back better’ domestic, plus one each from Hong Kong and
from Europe, with the rest coming from APAC, commitments crowds in private investment. South Korea.
North America, and LAC.
The top eight currencies maintained the 94%
Financial corporates experienced a slight
Currency share of the market seen in 2019, with the only
contraction (from USD58.7bn to USD55.7bn), but During 2020, 85% of the green bond volume was change in composition being SGD replacing AUD.
this was mainly due to much lower issuance from issued in one of the ‘hard’ currencies. This is an SGD increased its presence by 46% to USD3.3bn,
Chinese banks, with European and US financial increase of 3% compared to 2019 and could be while AUD declined from USD5.4bn to USD3bn.
institutions exhibiting small increases of USD4bn due to a flight to quality, which would give hard The SGD market was exclusively domestic, with
and USD4.7bn respectively. currency issuers relatively easier access to the green bonds from two issuers, and green loans
capital markets. Green bonds were issued in 33 from a further nine.
The Asset-Backed Securities (ABS) category fell
currencies, one fewer than 2019. The share of the
by 37% year on year. Almost all (99%) of the deals
originate from the USA, and this was partially
top three currencies – EUR (48%), USD (28%) and Deal size
CNY (6%) – increased to 82%, compared to an
impacted by a decline in the contribution of The USD23bn of additional issuance in 2020
80% share the previous year but still lower than
Fannie Mae, from USD22bn to UD13bn. exactly matched the increase in bonds falling into
the 84-90% achieved between 2015 and 2018.
the USD500m-1bn bucket. This is unsurprising
Loans are almost always given to entities in the Both USD and CNY recorded a slight decline,
considering public sector issuer types, including
sovereigns, exhibited the most growth and tend
to issue deals of larger size. Benchmark-sized
Benchmark bonds dominate the green theme deals (USD500m+) help to attract more investors
100% 350 to the green bond market. Such deals are eligible
for inclusion in broad market indices, and
therefore attract non-specialised investors as well
80% 280
as those with dedicated mandates. The largest
(Average & Median) USD Millions
individual green deal of 2020 was the EUR6.5bn
60% 210 (USD7.6bn) German Bund, priced in September.
Overall, average and median deal sizes have
40% 140
continued to decline. Green ABS and loans are
characterised by small deal sizes, and these have
20% 70 respectively increased in number from 127 and
one in 2016, to 525 and 51 in 2020. However,
0% 0 while the number of ABS deals has more than
2016 2017 2018 2019 2020 quadrupled, the contribution to the total market
size has dropped from 10% in 2016 to 7% in 2020,
0-100m 100-500m 500m-1bn 1bn or more Average* Median*
both due to a small total market in 2016 and a
Source: Climate Bonds Initiative, 2021 decreasing average (ABS) deal size.
Sustainable Debt Global State of the Market 2020 Climate Bonds Initiative 8Tenor Most new green bonds have tenor of 20Y Perpetual N/A
company SNCF. Source: Climate Bonds Initiative, 2021
Energy, Buildings and Transport dominate UoP
Use of Proceeds (UoP) 100%
Together, Energy, Buildings, and Transport
were respectively the three largest UoP
categories, contributing 85% to the total in 2020.
75%
Energy and Transport, along with Land Use,
were the only categories to expand in 2020.
Sovereigns and government-backed entities
supported 26% year-on-year growth in 50%
Transport, with each contributing USD34bn.
Eight of the nine sovereigns issuing or increasing
their green bonds included an allocation to
25%
Transport in their use of proceeds (only Lithuania
did not). As noted, large, long-term infrastructure
projects – such as transport investments – are
least likely to be impacted by the ramifications of 0%
a global pandemic, particularly in the short term
2014 2015 2016 2017 2018 2019 2020
and in a prevailing low-rate environment. Almost
half of the Transport allocations of government- Energy Buildings Transport Water Waste
backed entities originated from France
Land use Industry ICT Unspecified A&R
(USD14.8bn). China was the second largest
Source: Climate Bonds Initiative, 2021
source (USD3.8bn), with eleven separate metro
projects raising cash in the green bond market.
The Buildings category remained static at Land use experienced 59% growth in 2020,
Investments directed towards Renewable around USD76bn. Private sector confidence to but it remains one of the smaller categories,
Energy exhibited 19% growth compared to 2019. begin new construction projects – as well as the contributing 5% overall. 51% of its total came
Almost half of that (46%) came from financial uncertainty surrounding the occupancy rates from sovereigns, with six out of nine including
and non-financial corporates, including energy of existing real estate – will naturally have been Land use expenditures in their frameworks.
companies, and others such as Telecom provider impacted by the COVID-19 pandemic. Further, Climate Bonds will be publishing an Agriculture
Verizon that issued its second green bond in bank lending will have tightened considerably for and Land Use State of the Market report later in
September, a USD1bn 10-year. all types of private sector loans, and a large part 2021, which will explore this underfunded yet
of this category comes from financial corporates. net-zero crucial category of activities.
Sustainable Debt Global State of the Market 2020 Climate Bonds Initiative 9External reviews SPO and Certification continue growth in 2020
Green bonds with external reviews accounted
200
for 89% of qualifying instruments in 2020,
compared to 82% in 2019. Climate Bonds actively 2018 2019 2020
encourages greater market transparency through
160
disclosure and celebrates this development.
Investors are increasingly seeking independent
proof of the legitimacy of green bonds –
120
suggesting a greater awareness of the risks of
greenwashing – while issuers are keen to avoid
liabilities associated with ‘getting it wrong’.
Number of green bonds
80
The volume of Certified Climate Bonds grew
by 14% in 2020. The Certified amount reached
USD150bn in October 2020, translating into 15% 40
of the green bond market, a milestone for the
integrity of the market. Large, high-profile issuers
including sovereigns, The Netherlands, Thailand
0
(green allocation), and Chile, and government-
backed entities like Société du Grand Paris, China None SPO Certification Assurance Green Rating
Construction Bank, and SNCF all printed Certified Source: Climate Bonds Initiative, 2021
Climate Bonds in 2020.
Second Party Opinions (SPO) are the most
popular type of external review, and volumes
increased by 17% year-on-year. Interestingly, the
number of bonds in that category declined by
2% over the period, which suggests that SPOs are
being sought for larger individual bonds. Indeed,
there was a 32% decline in the number of ABS
issuers obtaining an SPO and, as noted above,
this issuer type is composed of many small deals.
The issuer types contributing the most to the
growth in SPO volumes are government-backed
entities (85% year-on-year); sovereigns (75%);
and non-financial corporates (20%).
Some issuers sought external reviews from
multiple sources; including a number of CCB
issuers and issuers from Japan as commented on
in our recent Japan State of the Market report.9
Hence the sum of external review volumes is
greater than the total amount of green bonds
issued in 2020.
Sustainable Debt Global State of the Market 2020 Climate Bonds Initiative 10Sustainability
Introduction Supranationals lead on sustainability bond volumes 2020
Sustainability bond 160
issuance increased
Supranational Asia-Pacific
dramatically in 2020,
having almost reached 120 North America Africa
2019 levels in the first
Latin America
half of the year.
80 Europe
• Under the overall
sustainability theme, multiple labels have
emerged which finance green and/or social
USD Billions
40
projects, assets, or expenditures (see Appendix
A). Naturally, sustainability-related labels offer
a greater degree of flexibility to issuers as such 0
instruments can include a more diverse set
2014 2015 2016 2017 2018 2019 2020
of eligible investment categories. This allows Source: Climate Bonds Initiative, 2021
entities to issue products with different labels
under a single sustainability bond framework. Sustainability bond market domiciles in 2020
For example, CaixaBank designed a Sustainable 25 Supranational issuance is USD104.1bn 15
Development Goals Framework with the
intention to issue bonds under all three thematic 20 Amount issued Issuer count 12
labels: green, social, and/or sustainability.10
• The development of the sustainability theme was 15 9
marked by the publication of the Sustainability
Number of issuers
Bond Guidelines (SBG) by ICMA in June 2018. The 10 6
SBG extend good practice recommendations
USD Billions
around transparency and market integrity, 5 3
combining the green project categories of the
Green Bond Principles (GBP) and the social 0 0
categories of the Social Bond Principles (SBP).
r
y
Fr s
Ge ce
n
Be in
ut um
a
m d
Au ina
M a
er A
l
Th UK
o
g
na
he
nd
an
re
li
ic
ur
pa
n
US
a
an
ra
Lu aila
ex
• The sustainability space is evolving rapidly,
Sp
Ch
io
Ko
Ot
So lgi
bo
la
rm
Ja
st
at
h
an
th
which is reflected not just in the diverse
xe
Ne
pr
Source: Climate Bonds Initiative, 2021
Su
set of themes but also the trend towards
performance-linked instruments. Responding away from fossil fuel-related financing. The 11
Countries
to these developments, ICMA published Framework aims at facilitating the assessment
After SNAT issuers, which constituted the
Sustainability-Linked Bond Principles (SLBP) of an issuer’s level of alignment with climate
largest share of 2020 issuance, the USA
in 2020 aiming to provide a market framework change mitigation, adaptation, and low-carbon
placed second in the country ranking
with recommended structuring features, transition objectives.
with USD9.9bn. Pfizer issued a USD1.3bn
disclosure, and reporting. Such instruments
Europe enjoyed solid growth of 43% (USD31.6bn sustainability bond but the largest volume
remain outside the remit of this report, but
versus USD22.2bn in 2019), making up 20% of total came from debut issuer Alphabet. Its USD5.8bn
their development is discussed on page 17.
2020 issuance and ranking second after SNAT. Almost three tranche deal contributed 55% of the
half of the volume came from local governments USA’s volume and will finance projects that
Regions domiciled in Belgium, France, Germany, and Spain. fall under the nine eligible categories ranging
In 2020, sustainability bond issuance increased by from energy efficiency and circular economy
North America was among the regions showing
131% compared to 2019. Overall, SNAT accounted & design to affordable housing and a
the most impressive development. Issuance
for 63% of the volume, DM for 32%, and EM for 5%. commitment to racial equity and support
grew by 164% year-on-year from USD3.9bn to
This translates into growth for both SNAT and DM for small businesses.12
USD10.4bn mainly due to several benchmark-
compared to 2019, while EM volume dropped by
sized deals from non-financial corporates issued in The Netherlands and France took the third and
9% compared to the previous year.
the second half of the year (see ‘Countries’ below). fourth spots, with similar volumes (USD7.8bn
Most of the 260% growth from SNAT issuers and USD7.5bn respectively). Germany had
Issuance from Asia-Pacific remained unchanged
originated from development banks, especially four deals (USD4.5bn), of which three were
for the year, amounting to USD12.8bn and
multilateral (MDBs). The main driver was the benchmark-sized. One of them was market
making up 8% of overall issuance in 2020.
World Bank, but other players such as the Asian newcomer adidas AG, issuing its maiden
Infrastructure Investment Bank (AIIB) debuted LAC was the only region without record yearly sustainability bond, with a seven-year maturity,
sustainability bonds in 2020, issuing a total of issuance. Its USD888m volume only made up 1% in October. The deal funds sustainable materials
USD7bn from five deals. With its pledge to end of total 2020 figures and came from a single deal; and processes, such as purchases of recycled
all coal-related financing and partnering with however, this was a sovereign SDG-labelled bond and sustainably sourced materials, the latter
asset manager Amundi to create a dedicated from Mexico, therefore marking a crucial step in of which is also intended to positively impact
Climate Change Investment Framework (CIIF), developing the GSS bond market at both country underrepresented communities.
AIIB has developed a clear plan to transition and regional level.
Sustainable Debt Global State of the Market 2020 Climate Bonds Initiative 11In total there were deals from 23 countries in conflict and violence, which sit under several market. Having jumped from USD2.6bn in 2018
2020. The ‘Other’ category includes bonds different sustainable development projects and to USD11.2bn in 2019, it increased another 14%
originating from the Philippines, Turkey, and programmes in the IBRD’s member countries. In to USD12.8bn in 2020.
Iceland, all of which are less frequent visitors addition to being large issuers in the sustainable
The largest deal came from the French bank
to the labelled bond space. Newcomers to the finance space, development banks also provide
Société Générale with a EUR1bn (USD1.1bn)
sustainability country list were Iceland (one technical assistance to other issuers, and this
10-year bond. Similarly, the non-financial
bond from Islandbanki HF), and Luxembourg is part of the World Bank’s efforts to promote
corporate group is growing and constantly
(inaugural sovereign bond, and a second bond and finance sustainable development. This is
adding new issuers. This ranges from so-called
from Micro Small & Medium Enterprise Bonds). particularly pertinent in EM where, for example,
pure plays, which derive most of their revenues
the World Bank supports sovereign issuers
from green business activities (such as rail
Development banks generate 68% throughout the process of issuing GSS bonds.
company Deutsche Bahn), to sectors which are
of sustainability bond issuance The Republic of Korea issued the first sovereign less frequently seen in the space, such as luxury
sustainability bond in 2019. Three more countries fashion house Burberry Group.
Local Government 6% followed suit in 2020: Thailand (THB85bn/
Burberry Group was the first luxury fashion
Non-Financial USD2.7bn), Luxembourg (EUR1.5bn/USD1.8bn)
company to issue a sustainability-labelled
Corporate 8% and Mexico (EUR750m/USD900m), contributing
bond in September. The use of proceeds
3% of the total. In addition to financing and
Sovereign 3% included costs of responsibly sourced cotton or
refinancing GSS expenditures, such bonds do
products containing cotton as a main material,
not serve solely the purpose of raising funds.
expenditures related to the procurement of
The Climate Bonds Sovereign Green, Social
sustainable and recycled packaging materials,
and Sustainability Bond Survey found that such
and green buildings.
instruments have amongst other things the
ability to catalyse or enhance local markets,
therefore amplifying their impact beyond the use
Currency
of proceeds. One example is the Belgian region 96% of the issuance volume was
of Flanders, which issued a sustainability bond denominated in hard currency. The share of
having been encouraged by Belgium’s green other currencies remains small and includes a
Sovereign (see page 15). wide range, such as THB and SEK, which were
the leading soft currencies.
Development The lion’s share of local government
Bank sustainability bond issuance came from four Most sustainability bonds in 2020 were issued
68% countries in 2020: in USD. IBRD issued a total of USD84bn in a
variety of currencies, most prominently USD49bn
• Spain: Autonomous Community of Madrid
Financial Corporate 8% worth of USD-denominated debt. It was active
(EUR1.6bn/USD1.7bn); Basque Government
in multiple other currencies, ranging from
Government-Backed Entity 6% (EUR1.1bn/USD1.3bn); Comunidad Foral de
UYU (Uruguayan Peso, USD373m) and EUR
Source: Climate Bonds Initiative, 2021 Navarra (EUR75m/USD81m); Xunta de Galicia
(USD14bn), with the latter ranking second in the
(EUR500m/USD587m)
overall currency list.
Issuer types • Belgium: Flemish Community (EUR1.25bn/
Besides European countries, issuers from other
USD1.4bn); Region Wallonne (EUR1.5bn/
As previously mentioned, most sustainability domiciles also raised funds in EUR, such as
USD1.7bn)
bonds came from MDBs. Development banks Mexico with its sovereign for an equivalent of
thus comprised 68% of overall issuance, or • Germany: State of North Rhine-Westphalia USD820m (EUR700m).
USD108bn. In recent years, the World Bank Germany (EUR2.4bn/USD2.8bn)
Sustainability bonds have been issued in
(through its financing arm IBRD) has consistently
• France: Region of Ile de France (EUR800m/ 33 different currencies so far and the market
been the biggest player and issued a total of
USD899m); Ville de Paris (EUR300m/USD355m) is getting more diverse every year. In 2020 the
USD81bn in 2020. The volume of ‘World Bank
first sustainability themed bond in Armenian
Sustainable Development Bonds’ tripled In the private sector, issuers are increasingly
dram (AMD) was issued by Micro Small &
compared to 2019. The five themes of its recognising the value of the sustainability label.
Medium Enterprises Bonds, a financial corporate
lending activities are climate change; gender; Issuance volume from financial corporates has
domiciled in Luxembourg which raised the
jobs; public-private partnerships; and fragility, been steadily growing since the inception of the
equivalent of USD10.7m.
Over half of 2020 sustainability deals are in USD Other
NZL
THB
AUD
CAD
JPY
USD EUR GBP
0 20% 40% 60% 80% 100%
Source: Climate Bonds Initiative, 2021
Sustainable Debt Global State of the Market 2020 Climate Bonds Initiative 12Deal size 2020 sees growth in >USD1bn-sized sustainability bonds
In total, 85 deals worth USD144bn – making up 120 120
90% of overall 2020 issuance – were benchmark-
sized (USD500m or above). Fifty-five of those Amount issued Issuer count
100 100
were larger than USD1bn and represented a total
of USD125bn. This included the sovereign bonds 80 80
from Thailand and Luxembourg priced in the
second half of the year. However, most of this 60 60
Number of issuers
bracket originated from SNAT, which made up
74% of the >USD1bn bucket. Only a small fraction 40 40
USD Billions
of the deals with such size came from EM – in
total a volume of USD6bn –making up 73% of the 20 20
overall EM issuance volume.
0 0
The bucket encompassing the smallest bonds
(up to USD100m) comprised the largest number Up to 100m 100-500m 500m-1bn 1bn or more
of bonds (125) but just 2% of the issuance Source: Climate Bonds Initiative, 2021
volume. A large part of this consists of deals by
US Municipalities.
Tenor
Over 80% of the bonds issued in 2020 had an
original maturity of up to 10 years. The 0-5-
year bracket was the largest, with 43% of the
issuance volume.
The longest dated bond came from the World
Bank, with a 50-year maturity. Overall, 18% of
the volume had a maturity of over 10 years.
Among the 18 bonds with a tenor of more than
20 years, just two were from the private sector:
a 2050 USD2.5bn tranche from Alphabet, and
a 2060 USD290m bond from Tokyu Fudosan
Holdings Corp.
Sustainable Debt Global State of the Market 2020 Climate Bonds Initiative 13Social
Introduction Pandemic bonds from China helped Asia-Pac achieve solid growth
• The social theme 250
constitutes 18% of total
200 Supranational Asia-Pacific
GSS volumes.
• After the inception of 150 North America Africa
the social bond market
in 2006, this theme 100 Latin America Europe
USD Billions
experienced immense
expansion in 2020, reaching USD249bn in 50
issuance. This represents a ten-fold increase on
the prior year and three quarters of the entire 0
volume falling under the social theme. 2014 2015 2016 2017 2018 2019 2020
Source: Climate Bonds Initiative, 2021
• The dramatic growth can be largely attributed
to the effects of the COVID-19 pandemic China was responsible for >80% of individual social bonds
and the increasing desire of bond issuers to
80 Amount issued Issuer count 20
address health and other social concerns in a
more strategic way. China has 446 issuers
60 15
• Pandemic bonds contributed substantially
to the growth and accounted for 34% of 2020
social bond issuance. Climate Bonds’ definition 40 10
Number of issuers
of a pandemic bond is a UoP instrument
financing COVID-19 response measures under
USD Billions
a label specifically related to this. 20 5
Regions 0 0
Issuance skyrocketed in nearly all regions in
r
Ge ly
y
s
a
ce
an
a
n
at le
ud ala
th bia
m
A
l
Be K
na
he
nd
an
re
in
ai
US
U
2020. Overall, with the pandemic label as a
Ita
Gu Chi
iu
an
So Jap
io
Sa em
Sp
Ch
Ne Ara
Ko
Ot
la
rm
lg
Fr
at
er
sub-label of social bonds, all regions saw an
h
an
i
ut
pr
increase in issuance apart from Africa. Asia-
Su
Source: Climate Bonds Initiative, 2021
Pacific’s spike can be mainly traced back to
pandemic bonds from China, which comprised sized, and of these four (two each) came from the Government-backed entities
77% of the region’s issuance. Development Bank of Japan and Mitsubishi UFJ supported market growth
Financial Group. The bonds of the latter financed
The opposite was true for Europe, where only 13% of Non-Financial
multiple categories within the healthcare
the region’s volume came from pandemic-labelled Corporate 8%
segment as well as other social categories.
bonds. Similarly, for SNAT the pandemic label only
Sovereign 3%
contributed 8% of issuance, demonstrating that the The ‘Other’ category included the following
driver for this market continues to be Asia, specifically countries as newcomers, each with one deal:
China with USD68bn of issuance. SNAT took second Development
Bermuda: MetroCat Re (USD100m) Bank
place behind Asia in the region ranking, with 31%
which is mainly rooted – like the sustainability Finland: Kuntarahoitus Oyj (EUR600m/USD709m) 13%
universe – in development bank issuance, as well
Macao: Wynn Macau (USD1bn) Financial
as the EU SURE bonds which are classified as social
Corporate
bonds. LAC and North America followed with 2% Slovenia: SID Bank (EUR350m/USD397m)
8%
and 3% of total issuance volume, respectively.
Russia: Russian Railways (RUB25bn/USD342m)
Countries
Issuer types
As discussed above, SNAT and China made Government-Backed
Non-financial corporates saw the most
the largest contributions to the 2020 issuance Entity 47%
impressive increase, from USD2.4bn to
volume. France ranked third, with USD52.5bn
USD50.5bn, which translates into almost
coming from only ten issuers, two of which
2000% (20x) growth. This is important as it Local Government 1%
contributed USD46.2bn: Unédic Asseo (EUR21bn/
shows that the private sector is also increasingly Source: Climate Bonds Initiative, 2021
USD23.8bn), with six deals of which one was a
valuing labelled instruments and channelling
pandemic bond, and Caisse d’Amortissement de
funds towards social projects with a direct Financial corporates more than quadrupled
la Dette Sociale (EUR20bn/USD22.4bn), with five.
commitment. In total, non-financials made up their volume, with Citigroup and Bank of
Japan was the fourth largest source of social 20% of the 2020 issuance volume and mainly America issuing the largest deals (respectively
bonds with a total of USD8.8bn. Issuance was more consisted of Chinese issuers bringing pandemic USD2.5bn and USD2bn). The former funded
diverse, coming from 16 issuers, but the deals bonds to the market. The largest deal, however, affordable housing, targeting low- and
were relatively smaller. Just five were benchmark- came from Wynn Macau Ltd (USD1bn). moderate-income populations, including
Sustainable Debt Global State of the Market 2020 Climate Bonds Initiative 14Sovereign GSS bonds 4. Diversifying and increasing the investor Sovereign GSS
participation In most cases, a sovereign GSS
At the end of 2020, USD97.7bn worth of Market Country USD bn
Theme
bond broadened and diversified the investor
Sovereign GSS bond had been issued from 22 as of
base, a key motivation for issuing. Sovereign
sources. Green remains the dominant theme, 31/12/2020
GSS bonds also encourage investors to initiate
but sovereign bonds were issued under the
dedicated GSS investment strategies. DM France 30.7
Green
social theme for the first time in 2020 and
following in the footsteps of the Republic of 5. Offering pricing benefits A broader DM Germany 13.6
Korea’s debut in 2019, three more sovereigns investor base can facilitate tighter pricing.
DM Netherlands 10.0
introduced sustainability bonds. If this persists, we expect domestic Debt
Management Offices (DMO) to encourage DM Belgium 8.2
In January 2021, Climate Bonds published
governments to identify and develop a
the results of the Sovereign GSS Bond Survey, DM Ireland 5.7
pipeline of suitable GSS expenditures.
which found that Sovereign GSS bonds
DM Sweden 2.3
had the potential to change markets from 6. Facilitating cross border collaboration
seven angles.13 and enhance visibility Many respondents DM Hong Kong 1.0
collaborated with DMO counterparts both
1. Catalysing or enhancing local markets EM Chile 6.2
pre and post issuance, in knowledge forums
For most countries, a motivation for and an
and bilateral conversations. Even the use of EM Poland 4.3
outcome of issuing a sovereign GSS bond
proceeds bore an element of international
was to support the growth of a local green EM Indonesia 3.1
collaboration through funds being used to
bond market. Sovereign issuers serve as role
finance projects beyond the borders of the EM Hungary 1.9
models for other types of issuers. They can
issuing country.
provide investors with safe, liquid investment EM Egypt 0.8
opportunities which frees up capital for other 7. Delivering benefits that outweigh
EM Lithuania 0.1
lower rated and less liquid securities. challenges Issuing a sovereign GSS bond
is a large commitment and can present EM Nigeria 0.1
2. Contributing to larger strategic
challenges. For example, some issuers were
initiatives In most cases a wider strategic EM Fiji 0.05
not permitted to open additional accounts
initiative to achieve NDC targets, address
to manage proceeds from GSS bonds. The EM Seychelles 0.02
SDGs, and mitigate climate change and social
results of the survey suggest that there are
inequalities triggered the decision to issue. DM Luxembourg 1.8
Sustainability
tested solutions for these difficulties and
These plans included policies designed to
that most sovereign GSS issuers successfully EM Thailand 2.1
address emission reduction goals as well as
overcame hurdles. Challenges and initial
net zero ambitions. EM Mexico 0.9
costs were usually compensated for by
3. Amplifying transparency The process the benefits obtained including increased EM South Korea 0.5
of issuing a sovereign GSS bond typically visibility and reputational benefits. There are
EM Chile 2.1
Social
involved a budget tagging exercise and multiple channels of support from various
commitments to report on the allocation organisations such as development banks, EM Guatemala 1.7
of proceeds and their impact. These audits structuring advisors, second party opinion
EM Ecuador 0.7
greatly increase transparency for ministries (SPO) providers, and NGO’s such as Climate
and in parliament and extend to external Bonds that help to navigate the process from
stakeholders such as investors. creating the specific framework through to
post issuance reporting.
persons with disabilities, senior citizens, those Ecuador pioneered the sovereign social bond, support households, education, essential health
experiencing homelessness, and veterans. BoA with a USD400m debut in January 2020. The services as well as programmes to prevent and/
allocated funds to the health care industry, proceeds of the bond were earmarked to or alleviate the effects derived from COVID-19
specifically not-for-profit hospitals, skilled provide mortgages to low- and middle-income amongst others. Sovereign issuance plays a
nursing facilities, and manufacturers of health individuals at preferential rates giving homes to crucial role in developing local markets as they
care equipment and supplies. up to 24,000 families. The deal was supported by can serve as benchmarks and a blueprint for
a USD300m guarantee from the Inter-American other organisations (see box above).
Despite making up a small portion of the volume,
Development Bank (IDB), enhancing the appeal
it is worth mentioning that the first sovereign Government-backed entities made up 47% of the
for international investors, and reducing the
social bonds came to the market in 2020. total issuance volume with USD118bn, of which
borrowing costs for Ecuador.
Notably, all of them are from Latin America. USD52bn came from the EU SURE bonds (see
Ecuador and Guatemala issued two and three Chile brought a two-tranche deal split between 8- page 24). Development banks made up 13% of
deals respectively in the first half of the year, and and 13-year tenors with a cumulative volume of the share and local governments 1%.
Chile two deals in the second half. CLP1.6tn (USD2bn), raising funds for projects that
Sustainable Debt Global State of the Market 2020 Climate Bonds Initiative 15Other
The public sector including EU SURE, brought large EUR social deals
SEK
GBP
CLP
KRW
JPY
EUR CNY USD
0 20% 40% 60% 80% 100%
Source: Climate Bonds Initiative, 2021
Currency Tenor Volumes decrease toward longer-dated
bonds and so the 5-10-year bracket makes
70% of the social universe was issued in hard Social bonds tend to be short dated. Tenors of
up 24%, and tenors beyond 20-years only 6%.
currencies and 30% in soft currencies. EUR up to five years comprised just over half (53%)
In the second half of the year Urban
was top with 46%, its issuance originating from of the cumulative volume in 2020 translating
Renaissance Agency and University of Tokyo
Europe, Asia-Pacific and SNAT. The EUR was into USD132bn overall. Yet again this was due
National University Corp issued long-dated
followed by CNY, which was composed solely to pandemic bonds originating from China
social paper, both from Japan and maturing
of 631 pandemic bonds from China. The USD (USD66bn). As mentioned in the H1 2020
in 2060, and raising JPY30bn (USD288m) with
was third with USD48.9bn across five different publication, this is likely due to a need to
two deals and JPY20bn (USD190m) with one
regions, including SNAT. disburse funding more quickly than for large
deal respectively.
infrastructure projects and assets that make up a
Up next were JPY (2.8%), KRW, (1.1%), CLP
large part of the green bond funding sphere.
(0.8%), GBP (0.5%), and SEK (0.4%). For the first
time, social bonds were issued in CHF, MOP
(Macanese pataca), NOK, and RUB with one deal Social bond growth came from a handful of large deals
in each currency. Amongst those, the largest was
the first ever social bond from Russia, issued
160 Amount issued Issuer count 600
by Russian Railways (RUB25bn/USD342m) to
finance transportation accessibility, healthcare,
education, and disaster relief.
120 450
Deal size
Similar to the sustainability bond space, 86 deals 80 300
Number of issuers
were benchmark-sized (USD500m+). Among
these, 49 were at least USD1bn and made up a
USD Billions
total volume of USD151bn. 40 150
The number of deals rises dramatically towards
the lower size brackets, with the 100-500m range 0 0
comprising 260 deals (USD53bn) and 565 with a size
of up to USD100m (USD21bn). The latter was mainly Up to 100m 100-500m 500m-1bn 1bn or more
driven by Chinese pandemic bonds summing Source: Climate Bonds Initiative, 2021
USD18bn, and similar in the USD100-500m bracket,
with 189 deals and issuance of USD38bn. The
largest bonds (by far) were issued by the EU, its
five deals reaching EUR39.5bn (USD51.7bn) and
financing eligible assets under the ‘EU SURE Social
Bond Framework’, such as short time work schemes
or similar measures designed by Member States
to protect affected employees, including self-
employed people (see page 24).
Sustainable Debt Global State of the Market 2020 Climate Bonds Initiative 16You can also read
